More than one in 4 Americans with employer health insurance coverage skipped a doctor appointment in the past year due to cost, and more than one in 5 who purchased their own health coverage did the same, according to a 2018 survey by financial services company Bankrate.
Last week, U.S. Sens. Cory Booker and Bernie Sanders along with Kamala Harris introduced a bill that would create a federal agency tasked with the control of prescription drug prices.
Health insurance professionals see what’s happening, and according to panelists at the NJBIZ health insurance panel at the DoubleTree by Hilton in Somerset on Tuesday, one thing is clear: they’ve got to figure out how to fix it, because the government won’t.
“If we don’t fix the cost problem we’re going to see more regulation. Less regulation is better for the delivery of health care. I’m certainly sure the pharmaceutical companies are feeling that too,” said Kevin Joyce, vice president of insurance networks at Atlantic Health System. “The costs are incredible, and you’re starting to see more of that. It’s an issue that’s going to have to be addressed.”
Employers are most concerned about making it as easy as possible for employees to understand what their health insurance is all about, according to AmeriHealth New Jersey Market President Michael Munoz. With high-deductible programs, which are becoming increasingly more popular, the insured has “a lot more financial liability at hand,” and understanding the total cost of care becomes more and more important to those individuals buying those types of plans.”
One of the challenges that the insurance industry is up against, according to Munoz, is the decimation of the small group marketplace.
At its height, it had 900,000 members. Now, it’s down to 320,000, he said, and it’s deteriorating over time. Rising cost is an issue within that segment based on the fact that the risk profile within it has changed dramatically.
“We obviously saw a number of people move into the individual marketplace. That grew pretty substantially in the state, so you saw a shift in that direction. You have more moving toward employee leasing firms, which accounts for some of it. You have some employers opting not to offer coverage in the state, and then last but not least, what we’ve been pushing for is [to stop] the ability for companies to come into our marketplace, undermine the market by selling policies that don’t have to comply with regulations that are set by the Department of Insurance by the Legislature through the mandates they provide to make sure that the people are protected along with the fact that they have the ability to medically underwrite policies to set rates based on that company’s health risk profile,” Munoz said. “In our mind where we’ve tried to keep consistency and affordability top of mind, that undermines the whole thing.”
Currently, there are two bills moving through the legislature, Assembly Bill 5095 and Senate Bill 3270, that prohibit insurers from offering stop loss insurance to small employers. Although stop loss insurance is designed to provide reimbursement for catastrophic, excess or unexpected expenses, some small employers use it to self-insure part of the health benefits coverage for their employees.
The insurance comes from “carriers who quite frankly don’t even participate in the individual or regulated small group marketplace, essentially undermining the market that the state and we participate in,” Munoz said.
For Medicare patients, some savings have come via Accountable Care Organizations, or ACOs, which are doctors, systems and providers who work together to provide coordinated high quality care to Medicare patients. Atlantic Health’s four ACOs have saved Medicare more than $100 million since 2014, Joyce said.
It’s that type of collaboration that will help remedy cost issues in the health insurance industry, explained FNA Insurance Services Vice President Brian Bodner.
“Where we’re going is a collaboration between systems, between payers, providers, providers, advisors, employers. Even from the political landscape, politics get into the mix when they don’t see collaboration and they don’t see industry fixing the problems,” Bodner said. “That’s always going to be a constant tug of war, that’s always going to be there. But if we get it right as an industry in terms of collaboration, then well take care of it for our own industry.”
The panel was moderated by NJBIZ senior health care reporter Anthony Vecchione, who has covered the medical industry for three decades. The next event in NJBIZ’s panel discussion series will be the Women in Business Symposium on Dec. 17 at the DoubleTree by Hilton in Somerset.